Correlation Between Focus Media and Xiandai Investment
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By analyzing existing cross correlation between Focus Media Information and Xiandai Investment Co, you can compare the effects of market volatilities on Focus Media and Xiandai Investment and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Focus Media with a short position of Xiandai Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Media and Xiandai Investment.
Diversification Opportunities for Focus Media and Xiandai Investment
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Focus and Xiandai is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Focus Media Information and Xiandai Investment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiandai Investment and Focus Media is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Focus Media Information are associated (or correlated) with Xiandai Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiandai Investment has no effect on the direction of Focus Media i.e., Focus Media and Xiandai Investment go up and down completely randomly.
Pair Corralation between Focus Media and Xiandai Investment
Assuming the 90 days trading horizon Focus Media Information is expected to generate 1.35 times more return on investment than Xiandai Investment. However, Focus Media is 1.35 times more volatile than Xiandai Investment Co. It trades about 0.03 of its potential returns per unit of risk. Xiandai Investment Co is currently generating about 0.03 per unit of risk. If you would invest 578.00 in Focus Media Information on September 3, 2024 and sell it today you would earn a total of 112.00 from holding Focus Media Information or generate 19.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Focus Media Information vs. Xiandai Investment Co
Performance |
| Timeline |
| Focus Media Information |
| Xiandai Investment |
Focus Media and Xiandai Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Media and Xiandai Investment
The main advantage of trading using opposite Focus Media and Xiandai Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Media position performs unexpectedly, Xiandai Investment can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Xiandai Investment will offset losses from the drop in Xiandai Investment's long position.| Focus Media vs. Agricultural Bank of | Focus Media vs. China Construction Bank | Focus Media vs. Postal Savings Bank | Focus Media vs. Bank of Communications |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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